Prospecting vs lead generation: what’s the difference?
March 17, 2020
Some B2B sales professionals use the terms ‘prospecting’ and ‘lead generation’ interchangeably. However, they are not the same.
Their aims and methods differ significantly. There are specific situations where one is more effective than the other.
In this article, we’ll look at the differences, as well as which approach works best when.
What is prospecting?
Prospecting is an activity usually carried out by sales reps, on a one-to-one basis. The idea is to generate interest from targets who may not know who you are.
The types of B2B prospecting activities that sales reps engage in include cold calling, outbound emailing and LinkedIn direct messaging. It’s typically a short-term approach, a quick way to identify and qualify new clients, then move them through the sales funnel.
What is lead generation?
Lead generation is commonly a data driven marketing activity; a one-to-many approach. It’s a long-term, slower method of building awareness and engagement from a wider target market.
Examples of B2B lead generation could be a blog, a whitepaper or YouTube video, designed to attract leads to your organisation and start a relationship. Leads generated in this way will be warmer and pre-qualified, because they have already engaged with your marketing content and brand.
How do you know which one to use?
Not knowing which one to use can lead to empty pipelines, so it’s essential you employ the right approach at the right time.
If your pipeline is looking light and you need to replenish it quickly, you should look at prospecting. With prospecting, you can book appointments with qualified leads, fast. You will have to think on your feet and be comfortable with frequent rejection, but if your salespeople have the right skills, you can do it.
On the other hand, if time is on your side, lead generation is the way to go. It’s a longer-term approach that usually gets a better quality of lead further down the line.
Start by defining your Ideal Customer Profile and then create content that’s 100% focused on that persona. By enticing new business to your brand, you will build awareness and grow engagement - and ultimately, fill your pipeline with a steadier flow of warm leads.
If you need to start prospecting, here are some things you can try:
Emailing – compile a B2B sales lead list that matches your ideal customer profile and hit them with a short, yet attention-grabbing email, as personalised as possible.
Cold calling – get your prospects on the phone, qualify them to check they have a need for your product (as well as the authority to buy and the budget), then arrange a meeting to get to know them better. Cognism has published several articles on cold calling.
Social selling – contact your prospects on LinkedIn and start a conversation that will result in arranging a call.
Lead generation examples
If you want to start a lead generation process, here are some ideas:
Content marketing – create marketing content that engages your audience, such as blogs, webinars, eBooks or whitepapers. You can put them behind a gate, so a prospect would need to give you their email address before they can access them.
Account-based marketing (ABM) – a lead gen method that is growing in popularity, ABM involves reaching out to different people within the same target account, but with personalised content that addresses their individual pain points.
When prospecting and lead generation work together
Prospecting is more of a sales team activity, while lead generation will usually come from marketing. However, it’s much more powerful when the two functions work together.
In any B2B/SaaS organisation, sales teams and marketing teams should be closely aligned, with the common aim of bringing high-quality leads into the funnel. Sales and marketing should get together and set out their objectives.
Alignment means that they should also agree on a sales strategy, on the definitions of a lead and anything else that gets them working better together. It will stop the two teams duplicating work and treading on each other’s toes.
These stats prove how powerful sales and marketing alignment can be:
Companies that align their sales and marketing teams are 67% more efficient at closing deals.